Global Crop Protection Product Supply, Demand, and Use Trends — A Positive Outlook

The year 2017 ended as it began; with talk of mergers. Although 2017 saw the completion of the “merger of equals” between Dow and DuPont and the effective completion of the acquisition of Syngenta by ChemChina; the much anticipated acquisition of Monsanto by Bayer failed to materialize. With the EU now set to send Bayer a “statement of objections” cataloging potential reasons of “remaining concern” even the March 2018 hoped for completion date may come under pressure.

Aside these three “mega-mergers” there remain, however, many more to keep the regulators and the “investment community” active at all levels of the industry. At a global level, although not official, ChemChina and Sinochem are planning to merge in 2018; creating one of the world’s largest chemical groups with close to $120 billion in revenue. While this new entity will remain busy, both globally and domestically, with consolidating the Syngenta and ADAMA acquisitions, certain “spinoffs” from the ChemChina “stable” suggest that China’s interest in foreign agribusiness acquisition is not over.

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Divestments as a result of antitrust remedies for the two 2017 megamergers once again reshaped the industry. The EC (European Commission) “novel (but narrow!) antitrust theory” that consolidation might pose a risk to R&D resulted in the divestment of DuPont’s R&D and a large proportion of its crop protection business; later picked up by FMC. The same EC scrutiny of ChemChina/Syngenta effectively put “up for sale” ADAMA’s European Union (EU) portfolio. Nufarm later picked up many of these assets (the so called Century products) with combined sales of some $200 million for a “cash consideration” of some $490 million; in what if not the deal of the century was certainly the deal of 2017. By comparison the U.S. Federal Trade Commission was somewhat less severe with its remedies; with Amvac picking up on a good proportion of the enforced asset sales.

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